>> there was wall-to-wall artwork. >> narrator: 130 pieces of fine art vanish. >> picasso print. this is the golden egg. >> narrator: you won't believe the characters behind the heist. >> i said, "you know, we'll either be princes or prisoners [laughs] if this thing goes wrong." it's friday, that means it is time for "options action" ahead on oa, cathie wood's ark etfâ -- can you use options to play safely for rebounds plus, is it time to go long on some of these other beaten down stocks we are driving into it in just a few. those are hints and check out today's big bounce stocks rallying. after a volatile week. the dow jumping 466-points and the nasdaq surging nearly 4% higher while tech has been hit hard over the last few weeks, tony is detailing a trade on one etf

that he thinks has seen enough punishment tony, what are you looking at? >> looking at cathie wood's ark fund which is down 78% since the february highs i think for traders looking for opportunities, this is now the time to pull the trigger for this etf we take a look at the chart here, what the most important level to pay attention to is $35. that's where the etf broke out in november of 2017. well before we were sitting here talking about cathie wood. the stock has tested that level three times. the last time being the pandemic low. so the fact that we've pulled all the way back to those levels is now a time to potentially see long exposure in this fund i think we can use options to structure a simple way to gain some long exposure, but also provide some downside protection so the simple option strategy i want to use here is to go out to june of 2023, which is about one year from now and i'm looking to

buy the $43 call the options that are just about a dollar in the money. earlier today, i can pay about $10.45 for this one-year option to purchase the etf at $43 that gives me a premium of about 23% of the etf's value so in putting up a fraction of the capital giving me downside protection while giving the unlimited upside over the next year and about a month or so for this particular bounce >> mike, what's your take on this trade we have seen some of the components of ark certainly have bounces and investors getting into some of them like hood. what's your take on this trade and ark? >> well, the person that would say is that we saw actually a flurry of bullish activity on the options in ark around midweek. so just as it was taking the worst punishment, we did see people going in and buying calls, not as long dated as the ones tony is talking about, but

we did see it. i think really what was going on here is there was a lot of beta in this name i think people with looking at this as a potential opportunity to get upside leverage on a bounce that said, you know, i still think there's potentially a lot of trouble in several of these names. it's true that they have fallen a great deal, but i don't necessarily think all the punishment is over we take a look at a name like hood that's one of the names you mentioned. that's a company i still think faces serious questions. tesla's obviously the largest constituent and one that from an operational standpoint is doing exceptionally well but the valuation remains rich there i don't necessarily think despite this big bounce we're quite out of the woods yet for ark. >> carter, your take >> well, in many ways here, it's not idiosyncratic or specific to

ark, meaning the ark genone fund bounced as much or the fxi, the china, what we saw is the synchronized bounce in almost anything that was deeply bought and so thematically it's about whether there's money flow very bad week. there's a little money flow in today. in almost everything >> so, tony, find a word and if you can address what carter was pointing out in terms of you know, why did you choose ark over these measures of risk sentiment. >> it all comes down to the level that it traded down to the opening print on yesterday was $35. that's the breakout level i was referring to back to 2017 think about how far these stocks that are in this particular etf have come since 2017 in terms of revenues, eps. i think valuations here look attractive for some upside going out a full year. only spending 23% of the etf's

value near the bottom. >> well, the roller coaster ride for stocks has left virtually no area of the market untouched, but if you're hoping to use options to dip your toes back in without risking capital, the other traders have some names. carter, what are you watching? >> we thought wed try to maybe hammer home this point about it's not really about what the security s it's the setup. take a look at a few here. this is a comparative chart of ford motor versus intuit now, it's two colors two lines. one has nothing to do with the other. but they're identical. how identical? let's look at the next two charts the first one is ford itself high of 13.50. sorry, closed at a high of 25. a 53% decline. over the course of four, five, six months look at intuit exactly the same

53% decline. a high of 7.17 a low of 339 closed at 371. look at the chart where we started. sometimes it's about money flow. you get down to a certain amount, a bounce but again, it's not about what the business is. >> thanks for that, carter so mike, you've got a trade on ford which by the way, got a double downgrade just this week from wells fargo to sell >> yeah, so this is an interesting case so you know, when we think about something like ark, we're talking about high flying names sort of future economy types of stocks ford, of course, is an old name and a legacy economy type stock. the thing is that it is trading at quite a big discount right now. it's trading less than 13 times earnings still they do sell the most popular and a very high margin vehicle in the f-150

they have the lightning coming out. these are oversubscribed they're basically going to sell every one of them they can build. and i think people are discounting basically the run off for ice automotive here's something else to think about. at the current valuation, ford is trading at $470,000 enterprise value per electric vehicle sold that's just for their electric vehicle business compare that to about 780,000 in enterprise value for tesla so to me, i think this one seems pretty cheap that said because i don't think all the damage is done necessarily, like tony, i'm inclined to go out in time and dip my toe in the water by buying longer dated calls. i was looking out to january 2023 i was looking at the, those jan 13 calls i was looking at them yesterday. the stock was about 12.5 up a buck today. those are in the money now those would cost about $2.40

they represent 100 shares apiece so it's 2400 bucks in total. but this is a way to essentially get some upside exposure if you're so inclined i do own the stock i own january calls. mine are higher strike though because i got into them arguably a little early >> tony, what's your take on this trade >> yeah, i think for traders that missed out when ford was trading in that 13 to $14 range before it ripped higher, here is your opportunity to get back into long exposure here for ford as mike said, the lightning is really where i think the largest value that we can see from ford going forward right now. if you look at valuations, the fact that you have this 50% pullback really gives you quite an incredible opportunity here it's now trading at six times next year's earnings that's about a 30% discount to its long-term historical average. while i don't think it's going to be anywhere near tesla's valuations just because it's not the same from a tech and battery type company, but i think there's a lot you can catch up here from a valuations perspective.

this is a stock that belongs in the 20s range so using a call option like mike is using gives you upside exposure. unlimited upside exposure and that's really what you're looking for with an option strategy trying to pick a bottom here >> all right, let's get to the other stock that carter highlighted. intuit what's the trade there >> this is an interesting case if we take a look at its valuation going back to september '94, nearly 30 years ago, the average value is about 36 times forward estimates right now, it's trading 29 time forward earnings estimate. we're talking about a company that's growing eps at double digits not super high, but maybe 20%. eps growth this is growth at a reasonable price. why are we seeing that because they cater to small businesses and small business creations have been high so you've got a good underlying business a cheaper than average

valuation. we have a situation where a lot of these stocks have been oversold and this is a less risky way to get i think long any stock than going after the high flyers, which i think could have more damage so i'm going to use a very similar and simple trade structure. just looking out to january when the stock was trading around 373 or so. i was looking at the january 3.80 calls those cost $51.51 apiece these are expensive options because it's an expensive stock, but when you consider this is going to be representing 100 shares of stock, which would cost you $38,000, this is considerably less than that. and the important point here is that if the market does continue to decline, if we start to see today's exuberance turn into next week's frustration and disappointment, this is not going to decline at quite the same rate if we see further weakness of course, it's not going to

in the near term participate quite as much either, but that's sort of the nature of using options. you get a little convexity, you can limit your risk and i think this is one way to do it >> tony, you like this trade >> yeah, because i think one thing that's underappreciated about it is the recent transition that this firm has made to a cloud based sass model. mike was referring to 20% year over year growth you combine that with 21% profit margins and the fact it's trading around the 26 to 29 times next year's earnings, i think this is relatively cheap for this type of company especially if you look at their peers. so the fact you pulled back to this very important technical level, $360 yesterday, that is the opportunity that i see to get upside exposure and mike is using out of the money call option one, because the stock is very expensive. so the lessen the cost of the call option, you can buy slightly out of the money one. here, he's risking 14% of the stock's value going out to january 2023 reducing your downside risk in a stock like this that is still

expensive from a price perspective, it's not necessarily cheap from a valuations perspective he's referring to using a convexity to your favor. because he has a slightly out of the money call option here, if the stock continues to decline from here, the delta on this particular option is going to reduce and have lower downside exposure as it continues to fall >> carter, final word. >> funny you mentioned about the downgrade. wells fargo downgrades and same day morgan stanley upgrades it what do we do? some to 23 some have price targets of 18. stick with the charts. >> okay. coming up, we're taking a look back on one of tony's trades that's deep in the green through two weeks of red we've got the details on how to play it. for everything options action, check out our website. while you're there, sign up for our newsletter much more right after this

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that's powerful. couldn't said it better myself. you just did. unbeatable internet from xfinity. made to do anything so you can do anything. whoa. welcome back a couple weeks back, towards the beginning of the sell-off, tony laid out a long trade on t-mobile >> given the week's volatility, i think there's a lot of interest if you will in finding

some level of safety and by looking at a name like t mobile which is generally speaking a more defensive name and the fact that it's reported earnings and the stock is down almost 7% here today, i think this is really an opportunity potentially to take advantage of some of this weakness sell some volatility and potentially again, find a bit of safety in defense. going out to the june 3rd expiration and selling a 118, 124, 139, 133 iron condor here and collecting about $3.17 >> there is still some time left on this trade, but it's seeing nice profits already tony, what are you doing now >> it's doing exactly what we're expecting. trading between the 124 and 133 range and we've seen implied volatilities at this time, if you've traded multiple contracts, think it's time to close half the position and keep the remaining half open towards

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welcome back time to answer some of your most burning questions. a fan has a question for the chart master what do you think about berkshire hathaway big selloff to the 200 day berkshire b, specifically. carter >> well, that's exactly what it is we have a chart that talk about the context of just your question the plot of a trend line is the point of a moving average. you can draw a trend line or automate the process the stock has sold off gently and quietly to trend to it's 200-day moving average, to its actual trend line and in principle, it's a selloff to a level of support where rebound potential is high. i'm a buyer. >> mike, what do you think >> look, i mean, this is a company that has a really stable cash flow positive business and it has a big war chest and hasn't been able to deploy it. i think if there are any names

that you would look at in an environment like this as a way to start looking for exposure, this would be it >> here's our next question. i have been buying shares of semietfâ soxl from the 30s down to 19s i want to sell calls against them, but i'm not sure how to approach it. what strategy do you recommend when selling options tony >> yeah, so for this, you most likely would want to sell some cover calls. rule of thumb is we have go out roughly 30 days and sell about a 15 delta covered call. the reason we use such a low delta is because you want to prioritize capital appreciation of the underlying etf in this particular case. over income because that's a primary risk that you're taking when you're owning this etf. you want to make sure you're paid for for the upside, but the one thing i'll say is when you're trading a leveraged etf, these are products not meant for long-term holding so if you have the opportunity to get out of these trades, do them quickly. >> good advice our next viewer asks, the dollar

index near highs it should crack at some point. i noticed there are etfs that have liquidity issues. that's the best play here with options? mike >> yeah, so i can understand if you're looking at udm. the open interest is not that huge probably 22, 23,000. uup though actually does have a lot of options activity. there's almost a quarter million open interest in there and for the most part, the bid ask spreads are reasonably tight here's an important point though when you're looking at the options market, sometimes you'll see that the spreads are narrow and sometimes they're going to be wider you can always use limit orders in that case and if you're looking to make a bearish bet, you can keep it simple because currencies don't move that much so you don't have to spend a great deal of premium. i was looking out to september those 28 strike puts those only cost a little over 70 cents a contract so this is one of those situations where even though the

underlying is not highly volatile, options can be a nice way to play it either because you want to minimize your risk or you're looking for a little leverage. >> up next, even more tweets on deck back in two.

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>> mike, your thoughts >> you know, obviously we have gdp data coming out weaker than expected that can caution bonds to bounce we've got the pce data right after that that could cause a bounce. second week in june, you've got to cpi data. that comes in lower than expected that could cause a bounce. we've got inflation at 8%. ten-year at 3% those don't reconcile. those bounces if we get them are going to be very short-term. >> our next viewer asks in your humble opinion, what is the best way to play this market? option spreads, leap options or butterflies? tony why don't you take this one. >> i think it really depends on your level in respect to options. if you're a beginner, buying long dated leaps are great ways to get long side exposure with some downside protection as you get more experience, you can start taking a look at spreads and this particular environment, i would look at

selling shorted dated options against some longer dated leaps that you purchased and take advantage of the elevated implied volatility that these short dated options currently see in the market. >> our next viewer asks further upside for netflix and amazon? good question. mike >> you know, i'm not surprised to see these two get a big bounce in here, but i'm not convinced about either one of these two. first of all, amazon, had one of the best retail environments we've seen in a long time and amazon's results were terrible as for netflix, we were seeing a net sub loss so my question would be you've got netflix, amazon, but why not disney and google/alphabet if i was going to play in the space, i'd rather have the latter two than the former two >> carter, what do you think >> to some extent, these are beta trades. singling out names that are some

of the most bombed out it could be ford, intuit, biotech. they're all going to go up together if it is the current bounce >> so in the same bucket tony, would you agree with that? >> a few weeks ago, i took an amazon short on earning and i had a price target of 2,000 to the downside we haven't reached that level yet. so i'm not a buyer of amazon, but netflix, we were a buyer of that yesterday in the 160s because this is a stock relatively that got hit very hard on subscriptions, not revenue and earnings so i'm a buyer of netflix, not of amazon. >> all right time now for the final call. carter >> ford and intuit for bounces >> tony. >> trying to catch a falling knife here with ark. buying a long dated call option on cathie wood >> mike. >> not every stock is cheap yet, but some are intuit and ford.

if you're looking to dip your toe in the water, buy longer-dated call options. >> that does it for us we'll see you back here next friday at 5:30 eastern time. do not go anywhere "mad money with jim cramer" starts right now >> announcer: this is a paid advertisement for csn. >> you know, many times, i've been out here with a new coin release, and i have asked for a drum roll. and in all honesty, in the past, it's really just been nothing but hyperbole. but this time, i really would like a drum roll. i don't think i'm gonna get one, but i really think i should have one. this is, i think, the singular most important numismatic event certainly of the last quarter century, perhaps in my entire professional career, in terms of interest, in terms of collectibility, in terms of